Good Idea, Wrong Time

When a reporter recently asked President Barack Obama about the House Republican efforts to pass the Cut, Cap and Balance Act of 2011, Obama explained that politicians "don't need a constitutional amendment to do our jobs. The Constitution already tells us to do our jobs -- and to make sure that the government is living within its means and making responsible choices."

Dear God, we're doomed.

Remember that the president's last tangible stab at a "responsible choice" was a budget that would have added $9 trillion of debt over the next 10 years. This was months before he realized the debt ceiling debate and "economic Armageddon" could bring about political opportunity. The White House went on to call the bill, which trades a debt ceiling increase for a constitutional balanced-budget amendment and caps on spending, "extreme, radical and unprecedented."

Considering nearly every state works with similar restrictions, it's not exactly unprecedented. And if it's "extreme, radical and unprecedented" to the administration, it undoubtedly makes plenty of fiscal sense. Certainly, it's easy to understand why an embedded statutory and/or constitutional limit on spending is enticing to many voters. But can we force fiscal restraint on those who don't want it?

Remember pay-as-you-go legislation? Passed to offset the cost of increased spending and reduced revenues, it exists in name only to both parties. The so-called "debt ceiling" is a similar abstraction. It reminds me of my biyearly "weight ceiling" pledge -- as in, there is none. Any ceiling that is always raised and then set as some new arbitrary level that is negotiated solely by the ones who are borrowing ... well, that doesn't comport to any definition of "limit." That's a federal budget.

The rating agency Moody's recently suggested that the debt ceiling be done away with completely, not because it's an artificial cap, but because it creates "periodic uncertainty" about our ability to meet our obligations. Notice that the ceiling on enormous debt is what creates "periodic uncertainty," not the debt itself. Surely, corporations should feel comparably unrestrained to borrow without limits -- you know, to create confidence among investors.